Shareholders Sue Amgen, Citing Lawsuits

LOS ANGELES (CN) - Shareholders claim directors of Amgen cost the company $200 million by paying kickbacks to push its anemia drug Aranesp, and spurred litigation in another case by telling its salesmen to go through patients' confidential medical records and use the information to push a psoriasis drug, Enbrel.

Amgen settled the Aranesp antitrust case for $200 million, according to the complaint. Ortho Biotech sued Amgen on Dec. 11, 2005, accusing Amgen of penalizing oncology clinics that bought Amgen's white blood cell growth factor drugs Neulasta and Neupogen, if they also bought Ortho's red blood cell growth factor drug Procrit, instead of Amgen's competing drug Aranesp.

A former regional vice president of WellPoint also sued Amgen, on March 28, 2008, accusing it of paying kickbacks to clinics, hospitals and doctors who bought Aranesp instead of Procrit, according to this complaint.

Amgen consolidated and settled the Aranesp claims for $200 million, according to the complaint.

Shelly Birch, lead plaintiff in the derivative lawsuit, says the New Jersey attorney general has subpoenaed Amgen for documents about the Enbrel marketing practices. Two Amgen salesmen sued the company, claiming Amgen fired them for refusing to go along with its plan to have them review confidential medical records and use it to push Enbrel, Amgen's psoriasis drug, which can cost up to $20,000 a year.

"Both former employees say doctors weren't directly paid for access to patient files. But many of the same doctors who allowed access to their patient charts, they say, were paid as much as thousands of dollar to host dinners and lectures advising physicians and patients about the drug," the complaint states, citing a Jan. 9, 2008 article from the L.A. Times.

Birch says she demanded documents about this case from Amgen, and it produced only 5 pages. She also objects that the 12 corporate officer defendants were paid tens of millions of dollars in salaries and bonuses while all this was going on. For instance, CEO Kevin Sharer, a defendant, was paid $24 million in 2006, Birch says.

Among the other director-defendant are Nobel Laureate David Baltimore and Amgen's Chief Compliance Officer Tom Zindrick.

She demands class damages for breach of fiduciary duty. The class is represented in Superior Court by Daniel Germain of Encino.

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